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11 Tips on how to start a business

Whether you’ve been wanting to start your own business for years, or had a sudden bright idea, read our start-up checklist of the most important things to think about when setting up a business.

Your business start-up checklist

1.    What’s the big idea?

Your business should deliver a product or service the market wants – and that customers are prepared to pay for. Understanding your market and the potential barriers you’ll face can help you avoid the common pitfalls that can cause a business to fail.

Is your idea unique? Read our guide on protecting intellectual property.

2.    Planning for success

The plan sets out your idea, lists the challenges your business may face, states your goals and explains how you’re going to measure your progress. Your business plan should always reflect reality as closely as possible.

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3.    What kind of business are you?

How you set up your business depends on the legal structure you choose. Each has its pros and cons, particularly when it comes to the admin required for paying tax, salaries and so on. 

Sole traders, partnerships, limited companies etc.

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4.    Do you need a business bank account?

Keeping money for the business separate to money in a personal account makes keeping track of what belongs to who much, much easier. Mix ups with personal and business money can have serious financial and legal repercussions, so it’s not worth taking any chances. A business account can also make it easier to secure finance, because most lenders won’t consider you without one.

Opening a business bank account can take a few days, so waiting until you need to make or receive a payment could create problems. Opening an account early also helps build a credit history for your business, which could help make it easier to get a business loan later on.

Finally, don’t leave opening a business bank account until you need one to receive or make a payment. Take the time to find an account that best suits your needs and remember that there’s more to look for than basic payment features.

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5.    Do you need cash to start – or to carry on?

If your business does need funding, a sound business plan is critical to secure it, but your chances will also increase if you make an effective pitch. Lenders want more than just a filled-in application form. They need evidence that you have the knowledge and ability to make your business a success.

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6.    Taking care of tax

Every business needs to pay tax, but how much depends largely on the business structure. If you have a good head for figures and a sole trader or partnership, then tax admin can be relatively straightforward. Just don’t forget that it takes time, and you may not have much of that in the early days.

There’s no legal requirement to use an accountant or tax adviser for any kind of business, but it can make life much easier – particularly when it comes to the hefty additional admin requirements for a limited company.

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7.    Starting with marketing

What makes your business unique? This goes beyond your business name and logo, and it’s not just about what you’re selling – it’s as much about how you sell it and how you interact with your customers

Speaking of customers – who are they? The smaller your business, the narrower your niche is likely to be, but identifying your target market is crucial for businesses of all sizes. Knowing who you want to sell to will help you tailor your marketing to get the attention of the right people

How will your customers find you? Effective marketing will attract customers, but what about those who hear about you through other ways? Even the smallest sole trader will benefit from a website with contact details. You can create one yourself for very little, or pay a professional to build something more complex. Social media also offers an easy way to let people know about your business

Don’t confuse marketing with advertising – marketing is the ‘what’, while advertising is a ‘how’ (there are many other ways to promote a business, too). And remember, you won’t make any sales until your customers know your business exists – and without sales, there’s no business

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8.    Where will you work?

Your location and how you sell are key considerations here. An artisan chocolate maker may not be best suited to an industrial estate off the motorway, for example, while a business that needs a warehouse for selling online doesn’t need to be on the high street.

If desks, phones and computers are all you need, though, don’t rush to start renting your own office. Other less expensive options may suit you better.

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9.    Taking care of talent

Finding the right talent is vital to help fulfil your business ambitions, but you’ll have some specific responsibilities if you hire staff and become an employer.

As well as paying wages, you also need to collect and pay income tax and National Insurance, and you might need to set up a company pension scheme. This is where an accountant becomes invaluable, as they can steer you through the complex requirements – but there’s also a host of guidance online.

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10.    Cutting through red tape

There’s no shortage of bureaucracy when you’re running a business, and getting to grips with the various financial and legal requirements can be a job in itself.

Your requirements will depend on the nature of your business, but you’ll typically need to consider such things as data protection, insurance and liability, protecting intellectual property, health and safety, licenses and permits.

If you open a business bank account, your bank may be able to advise on at least some of these areas, as will an accountant, but you can also get a basic grounding with these excellent online resources.

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11.    Doing business abroad

Some businesses plan for international expansion, while others seize a sudden opportunity abroad. Wherever you’re planning to do business, you don’t have to be well-established before thinking about trading abroad.

Unless you’re a serial entrepreneur, running your own business will almost certainly be a learning experience – so treat it like one. 

You’ll certainly need to know about more than just your core product, so that could mean you need to brush up on your writing or presentation skills, or just watch a few videos about managing your website.

Whatever the case, don’t be afraid to ask for help and take every opportunity to benefit from the wisdom of others – and learn from their mistakes. Whether it’s family and friends, or other business owners (networking is another skill worth sharpening), you may be pleasantly surprised by their willingness to lend a hand.

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Article courtesy of Article courtesy of Barclays
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